Why Win-Win-Win Propositions Are The Future Of Business

Founder and CEO of Seeds. I write about entrepreneurship, mobile applications and socially good innovations.

For decades, people have divided organizations into two categories: for-profit and non-profit. It’s common knowledge that those lines are increasingly blurring, and we’re reaching a pivotal moment in history at which businesses need to incorporate social good in order to stay competitive — particularly if they want to attract business from Millennials and Generation Z, reports Nielsen.

The convergence of doing business and doing good has actually been underway for a long time, but like any Darwinian process worth its salt, it’s been a tortuous and often haphazard journey. The earliest iterations involved major corporations opening corporate social responsibility (CSR) departments, which were essentially separate, non-profit extensions of the for-profit entity. These were often added as an afterthought, mere efforts to improve a brand’s public perception, and therefore its revenue.

The focus later shifted to the triple bottom line — a philosophy that factors in the financial bottom line of a company, but also its social and environmental impacts. First adopted in 1994 by John Elkington, this idea focused on the “three P’s: profit, people and planet.” (Incidentally, the '90s were the heyday of the cliched corporate mnemonic device). More genuine in their purpose than the CSR movement, triple bottom line companies prioritize success measures that truly do have positive implications for the greater good. But because these measures are not necessarily integral to an entity’s profit-engine, their capacity for doing good is still removed from the core of what drives a business forward, which inherently hobbles their prosocial intentions.

But as this evolutionary process of socially conscious capitalism continues to mature into the 21st Century, we’re seeing a more functional and effective model emerge, one that builds social good directly into business models. The 2015 Nielsen Global Corporate Sustainability Report showed that 66% of all consumers are willing to spend more for products that come from sustainable brands. As consumers demand more socially conscious behaviors from the brands they buy, businesses mindfully addressing this have created a wholly new system: the win-win-win. Everyone in the value chain benefits financially — the business, the customer and those in need.

Where corporate charitability was once a tax deductible afterthought, the future marketplace will be full of businesses with social good built into their core models.Rawpixel.com

The quintessential example of this paradigm shift, of course, is TOMS. Blake Mycoskie created the company after seeing the desperate need for shoes in poor Latin American communities. His strategy was to develop a business that sold a style of Argentine shoe, the “alpargata,” in the North American market. By advertising that each pair of shoes sold would provide a free pair to someone in need, Mycoskie’s company became an overnight sensation, selling 9x their available stock in their first few months online. This phenomenon marked a fundamental shift in the collective perception of how a for-profit business can have a truly symbiotic relationship with the common good.

Following in their footsteps have come a new generation of businesses who have adopted this model of “conscious capitalism.” Warby Parker emulates a similar model to TOMS, but with eyeglasses. Bureo Skateboards makes their skateboards from recycled fishing nets, helping to clean up their local shorelines with each new product and incentivizing fishermen to exchange their old fish nets rather than leave them out at sea. Even advertising agencies like DesignGood build their business models to explicitly support socially conscious and sustainable businesses, doing their part to empower companies like the aforementioned to achieve their greatest potential impact.

While your grandfather’s capitalism may have considered altruism as anathema to good business, it’s becoming ever more clear that contributing to the common good and making serious profit are no longer mutually exclusive. And as we’ve learned from the evolutionary history of the corporate conscience, the key factor is that this conscience needs to be built into a business at the start. So if you’re an entrepreneur with an interest in developing your own prosocial business enterprise but don’t know where to begin, here are a few ideas to get your gears turning:

One-lever thinking. Ask yourself: How can I pull one lever and rake in wins across the board like the aforementioned companies? Make a spreadsheet with three columns: Company, Consumer, Society. Play with ideas until you have something that works across all three columns. Remember, a socially conscious model only works if it’s built that way from the start

Work backward. Instead of trying to think of what kind of business you want to start, first ask yourself, What issues am I passionate about? What deep needs in the world can I help address? It may turn out that your passion for a particular issue may lead you to the right type of business to uniquely address it. TOMS addressed the need for shoes, Warby Parker the need for eyeglasses. Of course yours may not be so straight forward, but it’s important to consider that particular industries may be more conducive to addressing particular needs than others.

Build products that perpetuate social good. Elon Musk is the current king of this concept, Tesla being a forerunner in the sustainable energy market with its increasingly available line of electric vehicles, solar roof tiles, and pioneering battery technology. Sunrun is another example of a leader in the solar industry, paving the way for energy independent homes all over the world.

Build good directly into your product. Fifty dollars may not seem like much when you’re talking start-up funds, but if you live in the developing world it can make all the difference. Companies like Seeds allow any company with a website or an app to donate a portion of sales to microloans that provide sustainable help to entrepreneurs in needy communities around the world. Statistics show that consumers are 60% more likely to spend when a social benefit is attached to a potential purchase, making for a rock solid case that contributing to the greater good isn’t just a boost for the image...it’s also great for business.

With Millennials becoming ever more influential in the marketplace and Gen Z right on their heels, the old for-profit/nonprofit dichotomy will only recede further into the distance. And as we become increasingly disillusioned by the socially irresponsible behaviors inherent to many of our major corporations, the demand for conscientious business will only continue to grow. If you’re an entrepreneur, this means opportunity. Altruism is in, it’s extremely marketable and those who find innovative and effective ways to implement it into their business models will surely be ahead of the curve.

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